CPA Exam AUD Exam Questions
with Correct Verified Answers
Latest Update (2024/2025)
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An accountant who is engaged to issue a compilation report on one or
more specified elements, accounts, or items of a financial statement:
A) Must adhere to the compilation performance requirements
contained in the Statements on Standards for Attestation
Engagements.
B) Should attest whether such compile elements, accounts, or items of
a financial statement are free of material errors.
C) Should NOT describe the basis on which the accounts are presented
if that basis is other than generally accepted accounting principles.
D) Can issue the report for an entity of which the accountant is NOT
independent. - ANS ✓D) Can issue the report for an entity of which the
accountant is NOT independent.
Which of the following is a correct statement regarding reporting on
reviewed financial statements for a non issuer?
A) An accountant who is NOT independent is allowed to issue a review
report as long as the accountant discloses the lack of independence in
the review report.
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B) The date of the accountant's review report should be the day the
accountant discusses the draft report with management.
C) Reviewed financial statements must be prepared in accordance
with generally accepted accounting principles.
D) An accountant is allowed to issue a review report on the balance
sheet only and NOT on the other financial statements as long as the
scope of inquiry and analytical procedures were NOT restricted. - ANS
✓D) An accountant is allowed to issue a review report on the balance sheet
only and NOT on the other financial statements as long as the scope of
inquiry and analytical procedures were NOT restricted.
Under which of the following circumstances would an auditor most
likely issue either a qualified or disclaimer of opinion?
A) the financial statements contain an immaterial departure from
generally accepted accounting principles (GAAP)
B) The auditor performed alternate substantive procedures to
provide adequate assurance due to missing documentation.
C) There is substantial doubt about the entity's ability to continue as a
going concern.
D) The client's attorney refused to respond to the letter of audit
inquiry. - ANS ✓D) The client's attorney refused to respond to the letter of
audit inquiry.
Each of the following is normally performed while conducting a
review of interim financial information, EXCEPT:
A) Comparing disaggregated revenue data.
B) Making inquiries of financial management.
C) Reading minutes of the meetings of the board of directors.
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CPA
D) Obtaining litigation updates from external legal counsel. - ANS ✓D)
Obtaining litigation updates from external legal counsel.
According to the SEC, which of the following best describes a non-
audit service that, when jointly provided with the audit of an issuer,
would result in the accountant's loss of independence?
A) Preparing the client's tax returns based on information prepared
by management.
B) Providing a comfort letter in regard to the client's meeting the debt
covenant requirements.
C) Issuing a report on management's assessment of the client's
internal controls.
D) Preparing the client's footnote disclosure of significant accounting
policies. - ANS ✓D) Preparing the client's footnote disclosure of significant
accounting policies.
In connection with an audit of a non issuer, the auditor would
ordinarily use an engagement letter to:
A) Mutually agree upon contingent fees between the company and the
auditor.
B) Assert that a properly planned audit will detect and identify all
material misstatements.
C) Specify any arrangements concerning the involvement of the
company's internal auditors on the audit.
D) Determine which of the company's financial statement notes will
be compiled by the auditor during the audit. - ANS ✓C) Specify any
arrangements concerning the involvement of the company's internal
auditors on the audit.
CPA Exam AUD
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